Paterson says in a statement that the MOU, along with the$83-million Transportation Investment Generating Economic Recoverygrant from the US Department of Transportation, "is what will allowdevelopment of the terminal to move forward. Finally, the Statewill be able to embark upon phase one of this project, which isgood news for our construction workers, good news for the state andgood news for the thousands of passengers that crowd Penn Stationon a daily basis." Details of the MOU were not disclosed.

The TIGER grant covers slightly less than one-third of thereported $267 million cost of phase 1, which will entailtransportation-related improvements to the below-grade railinfrastructure under the Farley Building and Penn Station. The twoproperties are located across Eighth Avenue from one another. Inthe project's second phase, a new rail facility would beconstructed within the Farley building, only about 20% of which iscurrently used by the US Postal Service as its main facility in NewYork City.

Also on Wednesday, Paterson gave responsibility for the MoynihanStation project for the first time to both the Empire StateDevelopment Corp. and the Port Authority of New York and NewJersey. The two agencies would be involved, among other things, inhelping to develop a two-phase approach to the project, negotiatingan agreement that ensures Amtrak will use the new intercitypassenger station, assuring that the project gets additionalfunding through the American Recovery and Reinvestment Act andcoordinating federal assistance with the state's Congressionaldelegation and US senators.